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Chorus Aviation profits drop 65% in first quarter as it books severance costs

HALIFAX – Chorus Aviation Inc. (TSX:CHR.B) says profits dropped 64.9 per cent in the first quarter as it booked severence costs and suffered a foreign exchange loss.

The Halifax-based airline formerly known as Jazz said net income was $9.2 million which was a decline from $26.2 million a year earlier.

In the period, the company booked $5.7 million in severance costs as part of a voluntary severance program with senior pilots and maintenance staff, as well as a $5.6-million foreign exchange loss.

Operating revenue fell 4.8 per cent to $416.3 million.

Adjusted profit was down 35.4 per cent to $14.7 million from $22.8 million.

“The regional airline industry is changing dramatically both here and south of the border. Competition is increasing significantly,” said president and CEO Joseph Randell in a release.

“We must continue in our efforts to reduce costs, strengthen the fundamentals of our business, and improve our financial position to ensure we have the flexibility required to effectively respond and compete in our ever-changing markets.”

Chorus operates Air Canada Express flights under a capacity purchase agreement with Air Canada and well as offers charter service under the Jazz banner.